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[Newsmaker] Korea plans July bidding to sell Woori

June 22, 2015 - 20:20 By Kim Yon-se
Financial authorities plan to unveil a revised method for the sale of state-funded Woori Bank next month in their move to recoup taxpayers’ money, regulatory officials said Monday.

Market attention is again focused on the coming announcement of the Public Fund Oversight Committee, after the agency successfully completed the sale of the now-defunct Woori Financial Group’s stock brokerage unit and two provincial bank units over the past year.

Officials said the committee, as an arm of the Financial Services Commission, will put the commercial bank up for auction during the third quarter after publicizing the government-led sale method in July.

This will mark the fifth auction attempt of the now-split group’s flagship Woori Bank, after the committee failed to find a preferred bidder for about five years.

Though 23 potential investors had expressed takeover intentions since 2010, all of them pulled out during procedures or were rejected by the authority for various reasons. Among the former candidates were Kyobo Life Insurance, KB Financial Group and Shinhan Financial Group.

Woori Bank’s logo on a glass window at its headquarters in Seoul. (Bloomberg)

If it aims to retrieve the principal of taxpayers’ money without a loss, the authority must sell the state’s stake in the nation’s second-largest bank for at least 13,500 won ($12.20) per share.

But Woori’s stock price has stayed below 9,900 won for the past six trading sessions. It closed at 9,670 won on Monday, up 1.36 percent from the previous session.

The Korea Deposit Insurance Corp., a government agency in the finance sector, holds a 51.04 percent stake in Woori, after public funds were injected in the wake of the 1997-98 Asian currency crisis.

A regulatory official said the committee and Woori Bank have been active in holding investor relations sessions in the overseas markets including Europe in a bid to notify potential investors of the improved financial status.

Some economists stress that the political sector should be cooperative in finding a preferred investor as soon as possible.

The main opposition party should refrain from tackling the sale price and instead collaborate with the government to quickly recoup the taxpayers’ money, said Hansung University professor Kim Sang-jo.

Opponents say it is more important to raise the bank’s competitiveness on a gradual basis than to set a tight timetable for auction.

Woori, which absorbed Woori Finance Holdings in November 2014 and has six affiliates including Woori Card and Woori America Bank, is one of the nation’s four biggest banks.

Senior supervisory officials have clarified that foreign bidders would be given an opportunity on par with homegrown capital.

Before the sale of Woori Investment & Securities and other units, Woori Bank took up 75 percent of the ex-Woori Financial Group’s total assets.

By Kim Yon-se (